A way to potentially save cash for a tax- exempt 501 (c) (3)
As a 501 (c) (3) tax-exempt organization, you are permitted, under Federal Law, to pay only for unemployment benefits claimed by former employees. Think of this permission as setting up a “pay as you go” plan for unemployment benefits. Your organization is self-funding the insurance. Your organization is acting as the unemployment insurance department. Cash disbursements are only made when unemployment benefits are required for former employees.
This plan is NOT for every 501 (c) (3) tax-exempt organization. You need to carefully review your recent history of unemployment benefit claims, the financial strength of your organization, your current work force and the continuality of your programs and various locations moving forward. What are your chances of losing programs or locations and having to lay-off some of your work-force?
If interested in discussing further, please call me. I can discuss the rules and the pluses and minuses of making this decision and can direct you to organizations that can help you further explore this option for potential implementation.
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